NEW YORK: The US dollar rebounded against the safe-haven yen a day after hitting its lowest level against the currency in roughly a year and a half on greater risk appetite stemming from gains in equity and oil prices.
A report that top oil producers Russia and Saudi Arabia have agreed to freeze output ahead of a much-anticipated producers meeting on Sunday helped push global oil prices to four-month highs and lead energy shares higher.
The improved investor sentiment boosted the greenback to a session high against the yen of 108.78 yen a day after hitting 107.61 yen, which was its lowest level since late October 2014. The yen in the first three months of the year posted its strongest quarter since late 2009.
"Nobody needs the yen on a day when equities are flying and oil is flying," said Steven Englander, managing director and global head of G10 FX strategy at Citigroup in New York.
The dollar weakened against commodity-linked currencies such as the Canadian dollar, Mexican peso, the Russia rouble, and the Australian and New Zealand dollars. The dollar fell more than 1 percent against the Mexican peso to an eight-day low of 17.4423 pesos.
The report of the Russia and Saudi Arabia agreement had a "massive impact on sentiment" and drove the commodity-linked currencies higher, said Boris Schlossberg, managing director at BK Asset Management in New York.
The euro was slightly weaker against the dollar, and last traded down 0.14 percent at $1.1390 after hitting a roughly six-month high of $1.1464 earlier in the session.
The greenback has been independently weaker for the last few weeks, with the dollar index losing nearly 4.7 percent so far this year, as investors have pushed back their expectations for when the Federal Reserve will next raise U.S. interest rates.
"We reached key resistance points on the euro, and the market is waiting for the next catalyst, whether it's the Fed or the ECB to move it one way or the other," Schlossberg of BK said.
The dollar index, which measures the greenback's strength against a basket of six major currencies, was last up 0.06 percent after hitting 93.627 earlier in the session, which was its lowest level in nearly eight months.
The dollar was last up 0.13 percent against the Swiss franc at 0.9548 franc. The benchmark S&P 500 stock index was last up 0.88 percent.
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